Filed under: Hardware, Apple Financial
Apple pays $100m to Creative in patent lawsuit settlement
Remember all that talk of Creative beating Apple to the punch with patenting various elements of the iPod's UI? Today these talks came to an end, with Apple whipping out the checkbook, and Creative (I'm assuming) throwing a party. That's right: Apple has shelled out USD $100 million to Creative for "a paid-up license to use Creative's recently awarded patent in all Apple products." Fortunately, Apple might be able to get some of that cash back if Creative is successful in There is yet another bright side for Apple, however: Creative has also hopped on board the 'Made for iPod' program, and has a slew of accessories on the way for everyone's favorite little DAP, such as speaker systems, headphones and a family of X-Fi 'audio enhancement products.'
Isn't it great when everyone can just get along and play nicely together - especially when $100m says so? Check out Apple's press release for the rest of the details on the settlement.
[via MacMinute]
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Reader Comments (Page 1 of 2)
Daniel Gattermann said 6:39PM on 8-23-2006
Is the idea of navigating music sorted by artist, album, etc. really worth $100m?
It's not that absurd to sort your music alphabetically...
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David Chartier said 6:48PM on 8-23-2006
#1: I'm certainly no lawyer, but I think that awards in cases like this are sometimes determined by multiple factors, one of them being how much value the accused party has gained from their infringement.
Obviously, Apple has made a nice chunk of change off the iPod, which I believe was a helping factor in boosting this to a $100m settlement.
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The Jeremy said 6:56PM on 8-23-2006
The settlement probably also means that Creative will be exiting the DAP market in terms of their own Zen units. They've lost money ever since the iPod hit the market and now they don't have the support of Microsoft behind them now that the Zune will be coming out shortly.
Of course, some of us have contended for a long time that Creative's intellectual property lawsuit was a means of getting Apple to purchase their failed DAP business, just as the SCO lawsuit against IBM supposedly was all about originally.
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diulei said 7:04PM on 8-23-2006
Good ol' America! Sue, sue, sue!
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David said 7:14PM on 8-23-2006
I don't think Creative is going to quit the DAP business anytime soon.
They just announced a new version of their Zen Vision PVP and a 60GB version of the Vision:M
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Dan said 7:45PM on 8-23-2006
That "m" stands for MILLION, right? 100 MILLION dollars?
I'm astounded.
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Bophojones said 8:09PM on 8-23-2006
While $100M is A LOT of money, for a company like Apple and the millions of iPods they've already sold with an average of a $300 price tag, i think it's very possible this could help them (Apple) make money! With the press this is getting (and will get), you'd think people would just be more inclined to go purchase the next new iPod, because if it's worth $100M to Creative, it's gotta be worth $300 to the average consumer.
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ronn said 8:25PM on 8-23-2006
While I disagree with the settlement, it makes sense for Apple. Any prelim judgment against them would have cost them much, much more. Overall, they will recoup some of that money back through Creative's participation in the 'Made for iPod' program.
No matter the settlement with Apple, I'll be shocked if Creative exits the DAP market. They have even more incentive to sue other DAP biggies. Even if they don't grow their market share, there is a possibility that they can remain viable in the market with licensing fees and judgments in their favor.
Now Apple can concentrate totally on new iPods and other new products.
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Jeff Weitzman said 9:12PM on 8-23-2006
Good deal for Apple. Patent lawsuits are unbelievably expensive in time as well as money, and take years. To answer the question above, yes, any damage award for Creative (or for Apple if their countersuits were successful) would be based on the value obtained by the infringing party due to the use of the patented technology. In the iPod world, that's *big* bucks (Apple posted revenue of $4.37 billion last quarter of which about half is estimated to be iPod-related IIRC). On top of that you can get punitive damages in some cases, and then of course there would be the necessity of pay license fees going forward.
Weigh that risk against $100 million dollars max (may ultimately be less), ongoing income from the Made for iPod program, and co-opting a competitor into your brand's ecosystem--take that deal.
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Gavin said 9:29PM on 8-23-2006
Patent lawsuits are going to eat the industry alive. The U.S. legal system is going to be flooded with even more cases like this in the next decade so get ready for it people.
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kg said 9:36PM on 8-23-2006
Hopefully, we can now get some new iPod models. I'm not saying this lawsuit was the only reason the line has become so stale (10 months!), but who knows for sure? Oops, I just drooled a little bit.
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Joel Conrad Bechtolt said 11:28PM on 8-23-2006
While I don't know much about the case, I think it's cool Apple is following the rules no matter how sucky the outcome for them. In the long run, there is as much of a chance of me buying a "Creative" music player as me buying a Xerox PC. I dig my 5G iPod and my InteliMac way to much, even if they're both big, fat copycats!
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jbelkin said 11:49PM on 8-23-2006
The best legal settlement was when Southwest wanted to use a slogan something like JUST PLANE SMART that a tiny aviation company was using - but instead of suing the crap out of each other, the two founders agreed to arm wrestle (true story!). The founder of Southwest by now was a bit older so he lost but Southwest donated some 5 figures to charity and the other company allowed them to use the phrase ... I think people would've paid money to see Steve Jobs arm wrestle another guy ...
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Jon H said 11:55PM on 8-23-2006
If I recall correctly, if Creative had won a patent case against Apple, Apple could have had to pay triple damages. In other words, if Creative made a persuasive case that the total damages were $10 billion, Apple could have been faced with paying $30 billion.
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MacWebHosting said 12:25AM on 8-24-2006
Whoops! Sometimes is sucks to live in Singapore :(( However, even in the homeland of Creative not many people are buying. Club21 has just opened the 2nd (major) Apple Store here (largest in Asia) - all for a Country with slightly over 4M people. I think Creative desperately needed this money to help stay afloat, and please the shareholders.
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Joey said 1:44AM on 8-24-2006
@diulei
http://www.creative.com/corporate/about/
Go to that web address and read what is on the page. Creative is based in Singapore. Apple being a company with headquarters in the US got sued by a company with their headquarters in Singapore. So what does that have to do with "Good ol' America! Sue, sue, sue!"?
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Kenny Hemphill said 4:43AM on 8-24-2006
I think $100m is well worth it to avoid a protracted legal dispute with all the publicity that will accompnay it. It's a drop in the oceanas far as Apple's liquid capital goes and getting Creative on the Made for iPod gravy train will be worth a few million.
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DG said 5:09AM on 8-24-2006
This post is on the BBC's technology page:
http://news.bbc.co.uk/1/hi/technology/default.stm
TUAW's famous!
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Abby said 5:45AM on 8-24-2006
Wow, all this suing thing is getting a tad too much these days, especially these major cases.
Imagine a 100 million USD .... And as someone writes...
If Creative had won a patent case against Apple, Apple could have had to pay triple damages. In other words, if Creative made a persuasive case that the total damages were $10 billion, Apple could have been faced with paying $30 billion.
Astounding ...
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Tim said 8:18AM on 8-24-2006
If I recall correctly, Apple has something like $7 or $8 billion in cash in the bank. $100 million is a small price to pay to get this annoying little company off their back. Especially considering how much patent legal battles can cost.
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